Move over vapes, Americans appear to have a new addiction: Zyn, a tobacco-free nicotine pouch product, that has exploded in sales over the past year.
Philip Morris announced Thursday that it shipped about 350 million cans of Zyn in 2023, a whopping 62% growth compared to the previous year. Shipments typically correlate to sales even if they represent a slightly different measure of demand.
Growth is expected to continue this year with the company looking to ship more than 520 million cans, bolstering the Marlboro maker’s full-year forecast.
Zyn has become a cultural sensation in the past year, attracting the attention of Gen-Z consumers who have become loyal buyers of the product. It is aimed at adults 21 and up who already use nicotine.
A can of Zyn costs about $5 for about 15 pouches (in a variety of flavors) that contain various amounts of nicotine and are absorbed in a person’s gum and lip over an hour, then spit out. Nicotine is very addictive and can harm young people’s developing brains, according to the US Centers for Disease Control and Prevention.
However, like Juul, the popularity and growth of Zyn might face difficulties, in particular from US government.
By law, anyone who makes or sells ’non-tobacco nicotine’ must comply with FDA regulations, which include not selling to people under 21, not giving away samples and not making claims that their products are less harmful than cigarettes without FDA authorization.
Last month, Senate Majority Leader Chuck Schumer urged the Federal Trade Commission and Food and Drug Administration to investigate Zyn on how it’s being marketed to young people.
In response, a Phillip Morris spokesperson said that Zyn’s ‘marketing and advertising are strictly directed’ to customers 21 years and older and those materials only include people aged 35 and over.
Despite the growth, shares of Phillip Morris declined 2% in early trading because of lower demand for cigarettes. Big Tobacco has gradually shifted their focus away from cigarettes to smokeless alternatives, like vapes or ‘heatsticks’, for people to get their nicotine fix.
In 2022, Phillip Morris bought Zyn-maker Swedish Match to help the company’s pivot to investing in more ‘smoke-free products.’
CEO Jacek Olczak said in the earnings release the newer products now encompass 40% of total revenue, led by the growth of Iqos heated tobacco products that have surpassed the traditional Marlboro brand’s revenue.
The company said it is spending about $1 billion this year to invest in bolstering US production of Zyn to meet demand.